16 July 2013 06:31

Lenovo Confident About Long-Term China Outlook

Internet Big

HONG KONG--Personal-computer maker Lenovo Group Ltd. (LNVGY) is confident about the long-term outlook for its business in China as it sees untapped consumer demand for PCs as well as tablets and smartphones, despite a recent slowdown in the country's economic growth.

"In the short term, (the economy) is definitely affecting our PC growth in China," said Lenovo Chief Executive Yang Yuanqing at a press conference after the company's annual shareholder meeting. "From a long-term perspective, I think PCs will continue to increase."

Mr. Yang added that Lenovo's strong focus on smartphones and tablets in China will help the company sustain its overall growth in the market.

Mr. Yang's comments come days after reports from research firms showed that Lenovo had overtaken Hewlett-Packard Co. as the world's largest PC vendor. According to IDC, Lenovo's PC market share in the quarter through June rose to 16.7% from 15% a year earlier, topping H-P's 16.4% share.

Still, Lenovo's business outlook is not free of uncertainties, in part because China's economic growth is slowing.

China's second-quarter gross domestic product released Monday showed the economy expanded 7.5% from the year earlier, slower than the 7.7% growth in the first quarter. Even though consumer demand in China has so far remained strong, the slowing economic growth is spurring concerns.

"The speed of China's economic development has been affected by the global economy because exports are its major driving force," said Lenovo Chief Financial Officer Wong Wai Ming. "I don't think anyone can say that the world economy has already hit the bottom, but my view is that its decline is slowing down."

Read more news about Lenovo here.

Mr. Wong said that Lenovo's business in China is not limited to major cities like Shanghai or Beijing -- what it calls mature markets within China. In areas outside urban centers, "there's huge demand that has not been touched," he said.

Write to Juro Osawa at juro.osawa@wsj.com

Subscribe to WSJ: https://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

July 16, 2013 00:25 ET (04:25 GMT)

Copyright (c) 2013 Dow Jones & Company, Inc.



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